1.1                          A bill for an act 
  1.2             relating to economic development; authorizing the Iron 
  1.3             Range Resource and Rehabilitation Board to operate a 
  1.4             card club at the Giants Ridge recreation area; 
  1.5             providing powers and duties to the commissioner of 
  1.6             public safety; amending Minnesota Statutes 2002, 
  1.7             sections 298.22, subdivision 7; 299L.01, subdivision 
  1.8             4; 541.20; 541.21; 609.75, subdivision 3; 609.761, by 
  1.9             adding a subdivision; proposing coding for new law in 
  1.10            Minnesota Statutes, chapter 299L. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  [FINDINGS; PURPOSE.] 
  1.13     The mining industry in the Iron Range has suffered a 75 
  1.14  percent reduction in the number of iron and taconite mining jobs 
  1.15  in just over 20 years, from a peak of 16,000 in the late 1970s 
  1.16  to the present level of under 4,000.  The recent past has seen 
  1.17  the closure of plants of Reserve Mining, Hanna Mining, and most 
  1.18  notably, LTV Steel.  Among those plants that remain in 
  1.19  operation, many are facing layoffs or closure.  Eveleth 
  1.20  Taconite, for example, does not have enough orders to remain 
  1.21  open through 2003. 
  1.22     Assuming every mining job represents another 1.5 positions 
  1.23  in secondary employment, the Iron Range has lost another 18,000 
  1.24  jobs due to the downsizing and closure of taconite mines, 
  1.25  plants, and other facilities.  The cities and communities of the 
  1.26  Iron Range have seen a drastic reduction in revenue.  Moreover, 
  1.27  the Iron Range has also seen a dramatic reduction in its 
  1.28  population, particularly of young families with children, as 
  2.1   youngest workers were the first to lose positions within mining 
  2.2   companies.  This has also had a negative impact on tax and levy 
  2.3   revenue and the school districts and other public services they 
  2.4   support. 
  2.5      To improve the quality of life, to alleviate the loss of 
  2.6   jobs the Iron Range has suffered and the consequent negative 
  2.7   financial impact on its businesses, school districts, and 
  2.8   communities, and to stimulate economic growth, tourism, and hope 
  2.9   for its citizens, it is the intent of the legislature to provide 
  2.10  new opportunities for the Iron Range by providing for card clubs 
  2.11  under sections 2 and 4. 
  2.12     Sec. 2.  Minnesota Statutes 2002, section 298.22, 
  2.13  subdivision 7, is amended to read: 
  2.14     Subd. 7.  [PROJECT AREA DEVELOPMENT AUTHORITY.] (a) In 
  2.15  addition to the other powers granted in this section and other 
  2.16  law and notwithstanding any limitations contained in subdivision 
  2.17  5, the commissioner, for purposes of fostering economic 
  2.18  development and tourism within the Giants Ridge recreation area 
  2.19  or the Ironworld Discovery Center area, may spend any money made 
  2.20  available to the agency under section 298.28 to acquire real or 
  2.21  personal property or interests therein by gift, purchase, or 
  2.22  lease and may convey by lease, sale, or other means of 
  2.23  conveyance or commitment any or all property interests owned or 
  2.24  administered by the commissioner within such areas.  
  2.25     (b) In furtherance of development of the Giants Ridge 
  2.26  recreation area or the Ironworld Discovery Center area, the 
  2.27  commissioner may establish and participate in charitable 
  2.28  foundations and nonprofit corporations, including a corporation 
  2.29  within the meaning of section 317A.011, subdivision 6. 
  2.30     (c) The term "Giants Ridge recreation area" refers to an 
  2.31  economic development project area established by the 
  2.32  commissioner in furtherance of the powers delegated in this 
  2.33  section within St. Louis county in the western portions of the 
  2.34  town of White and in the eastern portion of the westerly, 
  2.35  adjacent, unorganized township. 
  2.36     (d) The term "Ironworld Discovery Center area" refers to an 
  3.1   economic development and tourism promotion project area 
  3.2   established by the commissioner in furtherance of the powers 
  3.3   delegated in this section within St. Louis county in the south 
  3.4   portion of the town of Balkan. 
  3.5      (e) In furtherance of fostering economic development and 
  3.6   tourism within the Giants Ridge recreation area, the 
  3.7   commissioner may operate a card club under section 299L.10. 
  3.8      Sec. 3.  Minnesota Statutes 2002, section 299L.01, 
  3.9   subdivision 4, is amended to read: 
  3.10     Subd. 4.  [CONFLICT OF INTEREST.] (a) The director and any 
  3.11  person employed by the division may not have a direct or 
  3.12  indirect financial interest in: 
  3.13     (1) a class A or B licensee of the racing commission; 
  3.14     (2) a lottery retailer under contract with the state 
  3.15  lottery; 
  3.16     (3) a person who is under a lottery procurement contract 
  3.17  with the state lottery; 
  3.18     (4) a bingo hall, manufacturer, or distributor licensed 
  3.19  under chapter 349; or 
  3.20     (5) a manufacturer or distributor licensed under this 
  3.21  chapter. 
  3.22     (b) The director or an employee of the division of alcohol 
  3.23  and gambling enforcement may not participate in the conducting 
  3.24  of lawful gambling under chapter 349. 
  3.25     (c) The director or an employee of the division of alcohol 
  3.26  and gambling enforcement may not have a direct or indirect 
  3.27  financial interest in a site that is the location of a card club 
  3.28  under section 299L.10 or participate in card playing at a card 
  3.29  club under section 299L.10. 
  3.30     Sec. 4.  [299L.10] [CARD CLUBS.] 
  3.31     Subdivision 1.  [ESTABLISHMENT; REVENUE.] (a) A public 
  3.32  entity that has been specifically authorized by the legislature 
  3.33  to do so may establish and operate a card club at a facility 
  3.34  consistent with the provisions of this section.  The public 
  3.35  entity shall contract with a private person to operate and 
  3.36  manage the card club.  It is the intent of the legislature that 
  4.1   proceeds from card playing activities shall be used by the 
  4.2   public entity to promote and improve tourism and economic 
  4.3   development in communities of the state.  
  4.4      (b) The public entity, after payment of costs and other 
  4.5   expenses, shall deposit card playing proceeds received from 
  4.6   charges authorized under subdivision 8, and shall use them 
  4.7   consistent with the purposes of paragraph (a).  The public 
  4.8   entity may establish bank accounts or funds, if necessary, for 
  4.9   the purposes of making deposits under this subdivision. 
  4.10     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
  4.11  the following terms have the meanings given.  
  4.12     (a) "Card club" means a facility or portion of a facility 
  4.13  where the commissioner has authorized a licensee to conduct card 
  4.14  playing.  
  4.15     (b) "Card playing" has the meaning given in section 240.01, 
  4.16  subdivision 25.  
  4.17     (c) "Facility" means a convention center, recreational 
  4.18  facility, or similar place or project that is designed to 
  4.19  promote economic development and tourism, and that is publicly 
  4.20  owned and operated or in which a public entity has acquired an 
  4.21  interest.  
  4.22     (d) "Licensee" means a private person that has been hired 
  4.23  by a public entity to operate and manage a card club.  
  4.24     (e) "Public entity" means an authority, board, or other 
  4.25  governmental entity that has been created to foster local or 
  4.26  regional economic development and tourism.  
  4.27     (f) "Unbanked" has the meaning given in section 240.01, 
  4.28  subdivision 26. 
  4.29     Subd. 3.  [LICENSE REQUIRED.] (a) A person may operate a 
  4.30  card club at a facility and offer card playing services to 
  4.31  patrons only if the commissioner has issued the person a license 
  4.32  to operate a card club under paragraph (b) and the commissioner 
  4.33  has approved the plan of operation under subdivision 11.  The 
  4.34  commissioner may withdraw authorization for operation of a card 
  4.35  club at any time for a violation of a law or rule governing card 
  4.36  club operation. 
  5.1      (b) If the director determines that the applicant will 
  5.2   operate a card club in accordance with all applicable laws and 
  5.3   rules and the applicant's approved plan of operation under 
  5.4   subdivision 11; that the operation of a card club by the 
  5.5   applicant will not adversely affect the public health, welfare, 
  5.6   and safety or be detrimental to the effective regulation and 
  5.7   control of gambling; and that the applicant is fit to operate a 
  5.8   card club, the director may issue the applicant a license to 
  5.9   operate a card club at a facility.  The fee for a card club 
  5.10  license is $....... per year.  The director may give an interim 
  5.11  authorization for the operation of a card club that is effective 
  5.12  and may charge for interim authorization a proportionate amount 
  5.13  of the license fee. 
  5.14     Subd. 4.  [APPLICATION.] An application for a license under 
  5.15  this section must be on a form prescribed by the commissioner 
  5.16  and must, at a minimum, contain: 
  5.17     (1) the name and address of the applicant and, if it is a 
  5.18  corporation, the names of all officers, directors, and 
  5.19  shareholders with a financial interest of five percent or more; 
  5.20     (2) the names and addresses of any holding corporation, 
  5.21  subsidiary, or affiliate of the applicant, without regard to 
  5.22  whether the holding corporation, subsidiary, or affiliate does 
  5.23  business in Minnesota; and 
  5.24     (3) if the applicant does not maintain a Minnesota office, 
  5.25  an irrevocable consent statement signed by the applicant, 
  5.26  stating that suits and actions relating to the subject matter of 
  5.27  the application or acts of omissions arising from it may be 
  5.28  commenced against the applicant in a court of competent 
  5.29  jurisdiction in this state by service on the secretary of state 
  5.30  of any summons, process, or pleadings authorized by the laws of 
  5.31  this state.  If any summons, process, or pleading is served upon 
  5.32  the secretary of state, it must be by duplicate copies.  One 
  5.33  copy must be retained in the office of the secretary of state 
  5.34  and the other copy must be forwarded immediately by certified 
  5.35  mail to the address of the applicant, as shown on the 
  5.36  application.  
  6.1      Subd. 5.  [INVESTIGATION.] Before a license is granted 
  6.2   under this section, the commissioner shall conduct a background 
  6.3   and financial investigation of the applicant, including the 
  6.4   applicant's sources of financing.  The commissioner may also 
  6.5   conduct background investigations of persons employed by or 
  6.6   seeking employment with the licensee in positions for which 
  6.7   licensure has been required by the commissioner under 
  6.8   subdivision 6.  The commissioner may, or shall when required by 
  6.9   law, require that fingerprints be taken and the commissioner may 
  6.10  forward the fingerprints to the Federal Bureau of Investigation 
  6.11  for a national criminal history check.  The commissioner may 
  6.12  charge an investigation fee to cover the cost of the 
  6.13  investigation.  Of this fee, $7 from each charge shall be 
  6.14  deposited in the general fund. 
  6.15     Subd. 6.  [SUPERVISION.] The licensee is responsible for 
  6.16  conducting and supervising the card games, providing all 
  6.17  necessary equipment, services, and personnel, and reimbursing 
  6.18  the commissioner for costs related to card club regulation and 
  6.19  enforcement.  The commissioner may require, in a form and manner 
  6.20  prescribed by the commissioner, licensure of personnel employed 
  6.21  by the licensee.  
  6.22     Subd. 7.  [TYPE OF WAGERING.] All card club wagering 
  6.23  activities must be conducted in an unbanked system. 
  6.24     Subd. 8.  [CHARGES.] The licensee may charge patrons for 
  6.25  card playing services by deducting and retaining money from 
  6.26  wagers, by charging a fee based on playing time, or by any other 
  6.27  means authorized by the commissioner. 
  6.28     Subd. 9.  [UNDER AGE 18.] No person under age 18 may 
  6.29  participate in card playing at a card club.  
  6.30     Subd. 10.  [COMPULSIVE GAMBLING NOTICE.] A licensee who has 
  6.31  been authorized to operate a card club must prominently post in 
  6.32  the card club premises the toll-free telephone number 
  6.33  established by the commissioner of human services in connection 
  6.34  with the compulsive gambling program established under section 
  6.35  245.98. 
  6.36     Subd. 11.  [PLAN OF OPERATION.] (a) The commissioner shall 
  7.1   not issue a license to operate a card club unless the applicant 
  7.2   has submitted, and the commissioner approved, a plan of 
  7.3   operation for card playing activities.  The plan must set forth 
  7.4   all necessary details for conducting card playing activities, 
  7.5   including, among other things: 
  7.6      (1) specifying and defining all card games to be played, 
  7.7   including all governing aspects of each game; 
  7.8      (2) the time and location of card playing activities; 
  7.9      (3) the amount and method by which participants will be 
  7.10  charged for card playing services; 
  7.11     (4) arrangements to ensure the security of card playing 
  7.12  activities; 
  7.13     (5) designation of all licensed employees of the licensee 
  7.14  who undertake supervisory positions related to card playing 
  7.15  activities; 
  7.16     (6) internal control systems for card playing activities; 
  7.17  and 
  7.18     (7) a plan for the training of card club personnel in 
  7.19  identification of problem gamblers and appropriate action to 
  7.20  prevent or control problem gambling. 
  7.21     (b) The licensee must prepare and make available to all 
  7.22  customers a written manual that covers all portions of the 
  7.23  current plan of operation.  The licensee must also publish, in 
  7.24  pamphlet form, a condensed and comprehensive version of the 
  7.25  manual and make it available to all customers. 
  7.26     (c) The licensee may amend the plan of operation only with 
  7.27  the commissioner's approval.  The commissioner may withdraw 
  7.28  approval of a plan of operation. 
  7.29     (d) A violation of an approved plan of operation is deemed 
  7.30  to be a violation of a law or rule of the commissioner for 
  7.31  purposes of this section. 
  7.32     Subd. 12.  [LIMITATIONS.] The commissioner may not approve 
  7.33  any plan of operation under subdivision 11 that exceeds any of 
  7.34  the following limitations: 
  7.35     (1) the maximum number of tables used for card playing at 
  7.36  the card club at any one time, other than tables used for 
  8.1   instruction, demonstrations, or tournament play, may not exceed 
  8.2   50.  The table limit exception for tournament play is allowed 
  8.3   for only one tournament per year that lasts for no longer than 
  8.4   14 days; 
  8.5      (2) except as provided in clause (3), no wager may exceed 
  8.6   $60; 
  8.7      (3) for games in which each player is allowed to make only 
  8.8   one wager or has a limited opportunity to change that wager, no 
  8.9   wager may exceed $300. 
  8.10     Subd. 13.  [REIMBURSEMENT TO COMMISSIONER.] The 
  8.11  commissioner shall require that the licensee reimburse the 
  8.12  commissioner for the actual costs, including personnel costs, of 
  8.13  regulating the card club.  Amounts received under this 
  8.14  subdivision must be deposited in the general fund. 
  8.15     Subd. 14.  [REPORTING.] The licensee shall report all 
  8.16  income generated by the card club in an annual report to the 
  8.17  commissioner.  The report shall also account for all costs of 
  8.18  operation, taxes paid, and net profits to the licensee. 
  8.19     Subd. 15.  [INSPECTION.] The commissioner may inspect a 
  8.20  card club licensed under this section. 
  8.21     Sec. 5.  Minnesota Statutes 2002, section 541.20, is 
  8.22  amended to read: 
  8.23     541.20 [RECOVERY OF MONEY LOST.] 
  8.24     Every person who, by playing at cards, dice, or other game, 
  8.25  or by betting on the hands or sides of such as are gambling, 
  8.26  shall lose to any person so playing or betting any sum of money 
  8.27  or any goods, and pays or delivers the same, or any part 
  8.28  thereof, to the winner, may sue for and recover such money by a 
  8.29  civil action, before any court of competent jurisdiction.  For 
  8.30  purposes of this section, gambling shall not include pari-mutuel 
  8.31  wagering conducted under a license issued pursuant to chapter 
  8.32  240, participation in card playing activities under chapter 
  8.33  299L, purchase or sale of tickets in the state lottery, or 
  8.34  gambling authorized under chapters 349 and 349A. 
  8.35     Sec. 6.  Minnesota Statutes 2002, section 541.21, is 
  8.36  amended to read: 
  9.1      541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.] 
  9.2      Every note, bill, bond, mortgage, or other security or 
  9.3   conveyance in which the whole or any part of the consideration 
  9.4   shall be for any money or goods won by gambling or playing at 
  9.5   cards, dice, or any other game whatever, or by betting on the 
  9.6   sides or hands of any person gambling, or for reimbursing or 
  9.7   repaying any money knowingly lent or advanced at the time and 
  9.8   place of such gambling or betting, or lent and advanced for any 
  9.9   gambling or betting to any persons so gambling or betting, shall 
  9.10  be void and of no effect as between the parties to the same, and 
  9.11  as to all persons except such as hold or claim under them in 
  9.12  good faith, without notice of the illegality of the 
  9.13  consideration of such contract or conveyance.  The provisions of 
  9.14  this section shall not apply to:  (1) pari-mutuel wagering 
  9.15  conducted under a license issued pursuant to chapter 240; (2) 
  9.16  participation in card playing activities under chapter 299L; (3) 
  9.17  purchase of tickets in the state lottery under chapter 349A; ~~(3)~~ 
  9.18  (4) gaming activities conducted pursuant to the Indian Gaming 
  9.19  Regulatory Act, 25 U.S.C. 2701 et seq.; or ~~(4)~~ (5) lawful 
  9.20  gambling activities permitted under chapter 349. 
  9.21     Sec. 7.  Minnesota Statutes 2002, section 609.75, 
  9.22  subdivision 3, is amended to read: 
  9.23     Subd. 3.  [WHAT ARE NOT BETS.] The following are not bets: 
  9.24     (1) A contract to insure, indemnify, guarantee or otherwise 
  9.25  compensate another for a harm or loss sustained, even though the 
  9.26  loss depends upon chance. 
  9.27     (2) A contract for the purchase or sale at a future date of 
  9.28  securities or other commodities. 
  9.29     (3) Offers of purses, prizes or premiums to the actual 
  9.30  contestants in any bona fide contest for the determination of 
  9.31  skill, speed, strength, endurance, or quality or to the bona 
  9.32  fide owners of animals or other property entered in such a 
  9.33  contest. 
  9.34     (4) The game of bingo when conducted in compliance with 
  9.35  sections 349.11 to 349.23. 
  9.36     (5) A private social bet not part of or incidental to 
 10.1   organized, commercialized, or systematic gambling. 
 10.2      (6) The operation of equipment or the conduct of a raffle 
 10.3   under sections 349.11 to 349.22, by an organization licensed by 
 10.4   the gambling control board or an organization exempt from 
 10.5   licensing under section 349.166.  
 10.6      (7) Pari-mutuel betting on horse racing when the betting is 
 10.7   conducted under chapter 240.  
 10.8      (8) The purchase and sale of state lottery tickets under 
 10.9   chapter 349A.  
 10.10     (9) Participation in card playing activities under chapter 
 10.11  299L. 
 10.12     Sec. 8.  Minnesota Statutes 2002, section 609.761, is 
 10.13  amended by adding a subdivision to read: 
 10.14     Subd. 6.  [CARD CLUBS.] Sections 609.755 and 609.76 do not 
 10.15  prohibit participation in card playing activities under chapter 
 10.16  299L.